Test 2 Study Guide (Ch. 7-11)

What is segmentation strategy?

• Chapter 7 has least amount of questions; most from Ch. 11

• Some questions from definitions in book that we did not go over in class • Concepts in book from Ch. 11

Chapter 9 

• Step 3: Evaluative Segment Attractiveness

o Profitable—make $

o Substantial—has to be big enough that a true market exists

o Identifiable—must be able to identify the people

o Reachable—must be able to get to the people with your campaign o Responsive—consumers have to be able to respond and take action • Step 4: Selecting a Target Market

What is brand equity?

o Picking segments of customers that make sense

o “No brainer” for that group to pick you!

o Determining which segments they can serve best

o Should only enter segments where company can create superior  customer loyalty  

• Segmentation Strategy—4 Main Ways

1. Undifferentiated—(mass marketing) is anti-targeting and going after  whole market. Very rare but applicable to a few products

a. i.e. sugar, Coca-Cola

b. Advantages:  potential savings on production and marketing  costs

c. Disadvantages—more susceptible to competition  

2. Concentrated—(Niche marketing strategy) a specific market  a. BMW, Mercedes-Benz

What is greenwashing?

Don't forget about the age old question of university of memphis sociology

b. Advantages: concentration of resources, meets narrowly  

defined segment, small firms can compete, strong positioning

c. Disadvantages—segments too small, or changing; large  

competitors may market to niche segment

3. Differentiated—picking multiple niches/segments to go after—with  their own specific strategies

a. Advantages—greater financial success, economies of scale

b. Disadvantages—high costs, cannibalization

c. Can happen at corporate level as well as product level

4. One-to-one Marketing (Micromarketing)

a. What Amazon does

b. Individualized, information-intensive, long-term, personalized c. Goal of:  cost reduction, customer retention, more revenue,  

customer loyalty

• Positioning

o The place the product occupies in a consumers mind relative to  competing products If you want to learn more check out shelly schreier

o Should be tied to competitive advantage

o i.e. Dunkin Donut: “America runs on Dunkin” says the message that its  for everyone, specifically the working man while Starbucks is more  expensive and it’s not just about getting a coffee it’s about the  

experience

• Effective Positioning—know what competitors are doing

• Repositioning—Arby’s doesn’t want to be fast-food anymore and now wants  to be quick service

Chapter 7 

• Eastman Chemical Company If you want to learn more check out rutgers theater appreciation

• Marketing research

o The Role of Market Research 

???? Descriptive—gathering and presenting factual statements 

???? Diagnostic—explaining data We also discuss several other topics like Who is dr. francis townsend?

???? Predictive—“what if?” 

1. Global market

2. Role in a buying center

3. How companies have failed in China

Chapter 8 

• Idea of Big Mac—idea that you should be able to buy a good for the same  amount of currency—based on $1

• Organizations involved in World Trade (not the specific countries but what  the organizations do)

o GATT—became World Trade Organization 

o IMF—promotes monetary cooperation 

o World Bank—provides loans to developing countries for things like  infrastructure Don't forget about the age old question of purdue ma265

o World Trade Organization 

• Artificial Inflation—decreases demand because prices go up

• Gov’t action—tariffs and quotas

Chapter 10 

• Acxiom—largest data broker 

• Definitions from this chapter

• Geodemographic segmentation

• Data Warehouse—storage facility for data 

• Data Mining—looking for trends and patters that are meaningful and  explains things like why customers buy specific products together 

Chapter 11 

• Concepts in book***

• Breadth--# of product lines a company has 

• Depth--# of categories within a product 

• Why labels matter

o Most decisions about buying made in store 

o Regulations involved with what has to be on label

o Packaging

• Private Labeling—a company allows customers to put their own labels on  products

• Brand Awareness—in order for a consumer to buy a brand they have to  know it exists—even if it’s just 20 seconds before they buy it If you want to learn more check out danny benbassat

• Brand Equity Perceived Value—consumers perceive an additional value if a  product is “natural” or gluten-free

• Brand Equity—is derived from:

o Effective marketing strategies

o Brand’s stratus in the marketplace

o Brand’s position among customers

• Brand Associations—can be positive or negative

o A mental link customers make between your brand and key attributes o Volvo associated with safety, Prius is fuel efficient, BMW performance  • Brand Personality—giving a brand human characteristics

• Brand Loyalty—the degree of consumer attachment to a brand. 3 Levels: 1. Recognition—awareness of name, benefit, and package

2. Preference—is useful, consumer will buy if available…evoked set 3. Insistence—will search for; must have

• Makes consumers less price sensitive

• Makes marketing cost of reaching loyal customers a lot less

• Will insulate a firm from competition

Roles of packaging

1. Protect the product

2. Market the product

3. Provide convenience to distributors and consumers

***When products downsized during the recession the packaging stayed the same  but content in package went down!***

• Packaging

o Primary Package—one consumer uses 

???? Toothpaste tube

o Secondary Package—wrapper or exterior carton 

???? Box toothpaste comes in

• Labeling

o Information

o Legal requirements

???? Ingredients

???? Fair Packaging and Labeling Act of 1967

???? Nutritional Labeling & Education Act of 1990

???? Food and Drug Administration

• Socially Responsible Labeling

o Clearly defined

???? Certified humane raised and handled  

???? Fair trade Certified  

???? Organic

• Green washing

o Unclear terms

???? Antibiotic-free

???? Free range/free roaming—chicken only outside for 5 minutes a  day

???? Hormone Free

???? Natural—No regulations by FDA to be “natural”

???? Fresh